US consumer activity has improved measurably in the past few months. This includes rising car sales, increased general retail activity, rising levels of non-revolving consumer credit, and a moderation in personal savings levels. All of this is reflected in the Q4 2010 GDP growth estimate which recorded a robust 4.4%q/q increase in consumer spending. US consumer spending (adjusted for inflation) is now at a level higher than its previous peak, achieved in Q2 2008.
The latest indicator of increased US consumer activity is credit card debt. In December 2010, US consumer credit card debt rose by $2.3 billion, seasonally adjusted (which is an annualised growth rate of 3.5%). This is the first, net monthly increase in credit card debt since August 2008. Amazingly, in the previous 27 months, consumers reduced their credit card debt by a total of $175.4bn or 18%.
The latest credit data suggests that US consumer’s are feeling a little more confident (confidence indicators have improved), and that they are a little less concerned about their income and wealth situation. All of which argues for the US recovery to continue in 2011.
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